Key Macroeconomic Indicators for Base Metal Prices (2017-8-25)

SHANGHAI, Aug. 25 (SMM) – Attention should be on US’s durable goods orders in July on Friday. Federal Reserve Chairwoman Yellen and European Central Bank’s Chair will deliver speeches. US dollar traded narrowly on Thursday’s night trading and closed with small gains. Base metals were mixed with SHFE 1710 copper hitting new high since August 2013, and those metals will keep diverging.

Final reading of US’s durable goods orders was 6.4% in June, which was much higher than market expectation and only dropped slightly against fresh reading, raising anticipation on US’s economic recovery. But, fresh reading of Markit manufacturing PMI fell to 52.5 in August, with production index registering a 14-month low and index of new orders also hitting a 4-month low. Purchases and inventory growth declined, which may make negative impact on durable goods orders in July. Market participants will reassess on US’s economic conditions and prospect, if fresh reading of durable goods orders slumps as expected in August.

SMM Price Outlook for Base Metals on SHFE (Aug. 25, 2017)

US’s monetary policy meeting minutes for July’s meeting released in the week ending August 18 showed that a possible of decline in inflation sent US dollar down briefly. If Yellen’s speech is positive than meeting minutes, it will shore up US dollar and enhance participation of balance sheet cut in September, and vice versa.

Global central banks usually release signals on monetary policy on annual global banks meeting. Eyes should be on European Central Bank Chairman’s speech with nearing of bond purchases cut plan in September. Two sources familiar with the matter said that Draghi will not deliver any message on monetary policy on global central banks meeting, reducing market optimistic outlook from bond purchases cut.